Correlation Between Hanshin Construction and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Hanshin Construction and Duksan Hi at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hanshin Construction and Duksan Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanshin Construction Co and Duksan Hi Metal, you can compare the effects of market volatilities on Hanshin Construction and Duksan Hi and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hanshin Construction with a short position of Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanshin Construction and Duksan Hi.
Diversification Opportunities for Hanshin Construction and Duksan Hi
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanshin and Duksan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hanshin Construction Co and Duksan Hi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duksan Hi Metal and Hanshin Construction is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hanshin Construction Co are associated (or correlated) with Duksan Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duksan Hi Metal has no effect on the direction of Hanshin Construction i.e., Hanshin Construction and Duksan Hi go up and down completely randomly.
Pair Corralation between Hanshin Construction and Duksan Hi
Assuming the 90 days trading horizon Hanshin Construction Co is expected to generate 0.64 times more return on investment than Duksan Hi. However, Hanshin Construction Co is 1.57 times less risky than Duksan Hi. It trades about 0.0 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.06 per unit of risk. If you would invest 697,248 in Hanshin Construction Co on October 16, 2024 and sell it today you would lose (49,248) from holding Hanshin Construction Co or give up 7.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanshin Construction Co vs. Duksan Hi Metal
Performance |
| Timeline |
| Hanshin Construction |
| Duksan Hi Metal |
Hanshin Construction and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanshin Construction and Duksan Hi
The main advantage of trading using opposite Hanshin Construction and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanshin Construction position performs unexpectedly, Duksan Hi can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Duksan Hi will offset losses from the drop in Duksan Hi's long position.| Hanshin Construction vs. System and Application | Hanshin Construction vs. SCI Information Service | Hanshin Construction vs. Hanjin Transportation Co | Hanshin Construction vs. UJU Electronics Co |
| Duksan Hi vs. Hanshin Construction Co | Duksan Hi vs. Seohee Construction Co | Duksan Hi vs. Inzi Display CoLtd | Duksan Hi vs. Nam Hwa Construction |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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